TSX rally pushes on with aid of banks, miners

TORONTO (Reuters) - Canada’s main stock index notched its fourth straight day of gains on Friday, with the heavily weighted financials and materials sectors leading the way as investors sought value after a bleak couple of months.

The index had slipped below 14,000 for the first time since mid-January last week, as investors fretted about slumping oil prices and slowing Chinese demand for commodities.

It fell 0.6 percent in July, after a 3 percent decline in June.

But banking stocks shook off those fears, coupled with short bets that a stretched housing market could hurt them, gaining 0.4 percent.

“The whole ‘shorting Canada’ is usually a short-term phenomena, because let’s face it, our financial sector has been a great place to be invested over the long term,” said Julie Brough, vice president at Morgan Meighen & Associates.

Royal Bank of Canada (RY.TO) rose 0.7 percent to C$76.27, and Canadian Imperial Bank of Commerce (CM.TO) gained 0.9 percent to C$93.36.

The rise came despite losses in oil and gas stocks, which were hurt by a drop in crude prices after output numbers showed OPEC producers were pumping near record levels into an already oversupplied market. [O/R]

“We’ve really taken a beating here in Toronto in the last little while,” said Rick Hutcheon, president of RKH Investments.

“People are beginning to troll for stocks that appear to have some lasting long-term structural value, good management. ... At some stage, things fall to a point at which value starts to surface and we may be there.”

Gildan Activewear (GIL.TO) was the most influential loser, falling 7.6 percent to C$42.18 after the clothing maker’s quarterly results fell short of expectations.